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Summary
- Tesla Inc is the biggest company ever to be added to the benchmark S&P 500 index.
- Over 222 million stocks of the EV maker were traded on Friday.
- Tesla stock has catapulted by over 730 per cent this year.
Electric vehicle maker Tesla Inc (NASDAQ: TSLA, TSLA: US), which is all set to debut on the S&P 500 Index on December 21 (Monday), will be the fifth largest constituent on the benchmark American index with a 1.69 per cent weightage. It will also be biggest company ever to be added to the benchmark index.
Tesla’s stock jumped nearly 6 per cent per cent on Friday, December 18, pushing its market capitalization to US$ 624 billion. The shares surged to at an all-time high of US$ 695 during intraday trading. Over 222 million stocks of the EV maker were traded on Friday, taking its 10-day average trading volume to 72 million.
However, it shares fell over 6 per cent in premarket trading on Monday.
The electric car maker’s stock has catapulted by over 730 per cent this year in anticipation of the historic inclusion on S&P 500. Tesla will also join the S&P 100 and replace Occidental Petroleum Corp. (NYSE:OXY) from the index.
Market strategists are keeping a close watch on the volatility of the key Wall Street index once the heavyweight component is added to its constituents. Tesla stock has reflected volatility in the recent past.
Tesla One-Year Total Returns (Source: EODHD/Others, Thomson Reuters)
As per details on the TMX, Tesla stocks have a price-to-earnings ratio of 1357.4, price-to-book ratio of 41 and price-to-cashflow ratio of 162.6. It offers a positive return on equity of 4.94 per cent and positive return on assets of 1.37 per cent.
Tesla’s rise to be the most valuable electric car maker is a magnificent achievement since its $1.1 billion-loss in the first half of 2019. Even CEO Elon Musk once said on Twitter that Tesla shares are overpriced.
Tesla manufactured 145,000 electric vehicles in the third quarter of 2020 and posted total revenue of US$ 8.77 billion and net income (GAAP) of US$ 331 million.
It recently announced plans to raise US$ 5 billion from market by selling stocks from time to time. It is the third time in ten months that the company is raising capital.
